12 | FINANCE
NEWS By Geoff Hadwick
A UK residential property fund is looking for investors to finance first time buyer deals at up to 95% LTV, removing the need for a mortgage and significantly cutting the required deposit. The Mill Group’s Investors in
Housing Fund is looking to raise at least £100m. Homebuyers will be asked to purchase 5% of the property, and money from the fund will be used for the remaining 95%, eliminating the need for a mortgage lender. The buyer will pay a monthly
co-investment charge, will be comparable to the cost of servicing a mortgage at a similar or lower LTV, and will be designed for buyers intending to stay in the property for at least fi ve years. There will be no stamp duty when buyers
obtain their initial 5% of the property. After 5 to 7 years, homebuyers are expected to buy out of the fund, perhaps by getting a traditional mortgage on the
www.opp.org.uk |MARCH 2011 Fund alternative for fi rst-time buyers
provides a source of information that homebuyers don’t normally get, says Wisgard, adding “no one gives the consumer good investment advice, on whether the house price is likely to change in line with or exceed the house price index. We research and will only fund properties that are a good investment.” David Toplas, CEO of Mill Group,
Adding up | New fund could help fi rst-time buyers by allowing a smaller deposit
remainder of the property. It is at this point that investors will see a return on their money. Mike Wisgard, a spokesman for the
Mill Group, told OPP that the fund would initially focus on just fi rst-time buyers, although was open to expanding to others in future. He also said the company expects good returns from the fund. According to Wisgard, “returns of
at least 6% per annum are projected.” He also argues that “fi rst-time buyers can afford but can’t get a mortgage, with deposits at 20% plus you’re talking £40k for a £200k house.” “This circumvents the whole problem,
and they can move into the home of their choice and save up.” The fund will only buy properties that are good investments, and this
said: “The deposit requirements for first-time buyers have reached impossible levels with the average in London exceeding 20%. It’s no wonder they are also on average 37 years old. “Co-investment aims to bring
institutional investment into the market by giving consumers the ability to get onto the housing ladder quicker than saving for these levels of deposit. “For investors it offers a realistic
way of investing in the residential market while earning attractive levels of income and participating in future forecast growth.”
QROPS not in danger New payment service
FEARS that forthcoming legal changes will destroy the QROPS (Qualifying Recognised Overseas Pension Schemes) market have been grossly exaggerated says a leading financial advisory company. “QROPS will continue to play a
central role in retirement planning for many thousands of pension investors regardless of the introduction of new fl exible drawdown options in April,” IFA Guardian Wealth Management told OPP this month. “Speculation that the reforms will kill
the QROPS market is wide of the mark,” the company’s chief executive David Howell told OPP. “In fact, it’s a different issue aimed at
a different type of client. Cross border pensions are still in the early stages of a rapid growth phase.” “Even after April, UK rules are
going to be more stringent than most other overseas jurisdictions so if people planning to live abroad have the opportunity to choose something better, then many will take it.” And Howell
also believes that the changes could even increase interest in the QROPS market amongst affl uent investors who won’t have the size of pension needed to benefi t fully from fl exible drawdown. “Flexible drawdown is now a known
quantity that will suit some people but disappoint others,” he said. “There isn’t going to be another shake-up any time soon so all those disappointed with these rules are going to be looking for an alternative.” QROPS have helped and encouraged thousands of overseas property buyers from the UK to choose to live abroad, allowing them to legitimately get around the ways in which UK pension rules can restrict how and when they take their pension benefi ts. Expatriates can transfer UK pension
money into a QROPS and, after fi ve years there, benefi t from the fact that there is no requirement to report this to HM Revenue & Customs. The Introduction of QROPS Pension
options came in 2006, covering state as well as private pension incomes.
CURRENCY specialist Moneycorp unveiled a new global online payment request service this month called PayCollect, designed to help “a wide range” of overseas property businesses such as “associations, auction houses, estate agents, developers and golf clubs which need to request and collect money from clients based abroad.” Moneycorp told OPP, “recognising
that consumers and businesses alike are often hit by extortionate bank charges, poor exchange rates and an unnecessarily complicated payment process, we have designed a seamless and secure service that enables corporate entities and individuals to access commercial rates of exchange and signifi cantly lower transaction fees than those offered by the majority of alternative systems.” “An individual or company completing an overseas payment through a bank could face a transaction fee of up to £40 in addition to poor rates of foreign exchange. The Moneycorp PayCollect service limits any charges and provides
competitive foreign exchange rates.” And .... “ with the online reporting tools, the payee can view transactional history in real time, seeing exactly when a client has made a payment to them.” The PayCollect service enables the
payer (requesting payment) to make an online payment using a credit or debit card which not only allows them to settle their invoices instantly but save them money. Marc Morley-Freer, Head of Payment Solutions at Moneycorp told OPP “time, money and effi ciency are crucial to all businesses and consumers. It is important that businesses have a secure and simple method of requesting and receiving payments from clients.”
Sending money | Quickly and easily
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